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Analysis of the Case N. Nagendra Rao v/s Andhra Pradesh

Earlier the duties of the State were mostly maintaining law and order. With increasing influence of the State in our everyday lives the normal view of liability of the State canít be accepted. The courts previously in crucial the liability of the State for wrongs committed by it have examined broadly the principle of sovereignty.

The present case is related to the Governmentís liability towards its sovereign acts and the tortuous act of its servant. In this case the question before the Supreme Court came that whether the confiscation of property by the Government comes under the sovereign act and will there no liability of the Government arise for the same.

Facts
The plaintiff-appellant of this case was N. Nagendra Rao and co. He had a business, he used to deal in fertilizers and food grains and he also had the license for the same. The authorities on 11th August, 1975 raided the premises where the plaintiff carried out his business. The police officer and the vigilance cell confiscated various things, which included huge stocks of food grains and fertilizers and also the non-essential items.

The police officer submitted the report on 31st August, 1975. The District Revenue officer subsequently in his powerís exercise under section 6(a) of the Essentials Commodities Act directed to handover the custody of the fertilizer to the Assistant Agricultural Officer, so that it could be distributed to the farmers and the food grains and non-essential items to the Tehsildar. Tehsildar was supposed to dispose the goods immediately and was asked to deposit the earnings for the same to the Government Treasury. But neither the Tehsildar comply with the order nor the Assistant Agricultural Officer.

Plaintiff-appellant against this submitted applications on 17th and 21st September before the District Revenue Officer claiming the deterioration of the fertilizers since no relevant steps were being taken. He requested to divert the fertilizers to him as no steps were being taken by the Government, so he will sell the goods and transfer the amount to the Government Treasury but the Government did not take any actions to his application.

When on 29th June 1976 the District Revenue Officer in the exercise of his power under section 6(a) of the Essential Commodities Act seized the goods of the plaintiff-appellant his license was cancelled as well. The District Revenue Officer Stated that though the plaintiff-appellantís fertilizer account is irregular i.e., he isn't always a defaulter of black-marketing, adulteration, or promoting the products for higher price than the usual price, so a few a part of the fertilizer be seized and the last can be again given back to plaintiff-appellant

The plaintiff-plaintiff-appellant against the above order appealed in the District & Session Court in which the court asked the goods to be returned to the plaintiff-appellant When the plaintiff-plaintiff-appellant lodged a complaint to the Chief Minister, Revenue Minister, Agriculture Minister and the other authorities then on March, 1977 the Assistant Agricultural Officer sent a notice with intention to return the confiscated goods.

After finally receiving the goods, the plaintiff observed that the goods were of less quantity and bad quality.
Then finally the plaintiff filed a suit before the District and Session Court claiming to get back the amount equivalent to the confiscated the goods. The court held that after the confiscation of the goods by the District Revenue Officer, the relationship of Bailer and Bailee between the Plaintiff and the Government was established.

The Government in this situation had a duty to look after the bailed goods and safeguard them from loss but the Government in this situation hadnít performed its duty. It was also held that the seizing of the goods by the Government doesnít fall under the purview of its sovereign act, hence the Government was held liable and was asked by the court to compensate the plaintiff-appellant.
The Government after this order filed an appeal before the High Court.

The High Court set aside the judgement of the District Court and held that the power that the Revenue Officer exercised falls under the statutory powers of the Government and hence it is not liable for damages.

Then the plaintiff against the above order filed a suit before the Supreme Court, he Stated that the act of seizing of the goods was not the sovereign power of the Government. The goods were in bad condition and it was the Governments duty to look after it.

Issues Raised
  1. Whether the goods seized in the exercise of the sovereign power gives the Government immunity from loss or damage suffered to the owner.
  2. Whether the seizure of a part of the goods immunizes the State from any claim of loss or injury suffered by the owner that were directed to be returned.

Arguments
The following arguments were made by both the parties before the Supreme Court:
Plaintiff:
  1. The plaintiff said that the confiscation of his goods by the Government doesnít comes under the purview of sovereign act of the Government.
  2. The goods were deteriorating and it was Governmentís duty to take care of it but they were negligent towards their part.
  3. The Government was liable for the damages suffered by him, thus he is entitled to receive damages for the loss from the Government.
Respondent:
  1. The Government argued that their act of seizing of goods comes under the purview of sovereign act of the Government.
  2. Hence, their no liability on the part of the Government arises.

Decision
At the first, when the plaintiff appealed in the trial court, it was found that the moment State took over the goods from the plaintiff, there a relationship of bailor and bailee was established. Going back to the basics we know the essentials of the contract of bailment and here all the essentials of it were fulfilled. There as a bailee it was the duty of the state to look after the goods bailed.

N. Nagendra v. State of AP should be examined within the ambit of the Vidhyawati Case. In the case of State of Rajasthan v. Vidhyawati,[1] A pedestrian was knocked down by a Jeep of the Government, the pedestrian died in the accident. The State of Rajasthan appealed to the court that it was doing its sovereign act and should be granted immunity.

The Court held that the State would be liable for the tortious acts committed by its servant. The distinction of sovereign and non-sovereign acts was not considered. Court stated that the State would not be held liable for its act within the ambit of Article 300 of the Constitution.

The court awarded the petitioner a sum of Rs 15000. Court added that in these modern times the State has to act for the welfare of the people and defence of sovereign immunity on the basis of old notions of justice canít be granted. In Nagendra Raoís case also the State under the Essential Commodities Act seized the goods for public welfare, as the goods were deteriorating so it was the Stateís duty to safeguard it. Hence the State was held liable for the losses suffered by the owner.

In the case of Kasturi Lal Ralia Ram Jain v. State of UP [2], the Police had suspected that the Plaintiff had stolen gold so the Police seized the gold from him. It was then misappropriated by one of the Police officer who ran away with the gold to Pakistan. Court held that that as the act of the State falls under the sovereign act so it canít be held liable.

If the State interferes with the life and liberty of the individual or gets involved in commercial or public activity then in that case the Sovereign immunity canít be used a protection. If the State get involved in such activity, then it must be legally bound to compensate. The State may get protection if it is acting in the public interest.

First the trial court held that the State was negligent in the course of performing its duty. The court asked the state to pay damages of Rs 1,06,125 for the stocks that were damaged and the trial court also asked the State to pay the amount with interest of 6%.

Then later on the above order was struck down by the Court and the court drew nexus on the basis of Kasturi Lal Ralia Ram Jain Case.

The Supreme Court upheld the views Stated in the case of Kasturi Lal and distinguished Vidhyawati case. The court held that in the barring functions of State that are primary and inalienable such as administration of justice, maintenance of law and order and repression of crime etc., the immunity canít be provided to the State. Referring to the principle of the Vicarious Liability it was held that if in the discharge of public property an officer of the State can be sued personally then for his negligence even, they can be sued. As this particular doctrine of Vicarious Liability is outdated and the power lies with the people so that immunity canít be claimed by the State. Hence the Court asked the State of Andhra Pradesh to pay the damages.

The Supreme Court laid down the following principles in this case:
  • Act of seizing the goods doesnít comes under the power of sovereign act.
  • The Government will be held liable for the tortious acts of its servant.
  • The servantís tortious acts cannot be sovereign act.
  • The doctrine of Sovereignty should be clearly enacted.

Analysis
I agree with the judgement given by the Supreme Court. The State had seized the goods of the plaintiff-appellant. The seizing of goods for the interest of the public comes under the functions of welfare State and not the primary functions. But here the court applied the principle of Vicarious Liability.

The District Revenue officer and The Assistant Agricultural Officer were at fault. They had committed the tortious acts. So, drawing the nexus with the Vidhyawati case and the Kasturi Lal case the court held that for the acts of the tortious acts the servant had committed, the master would be held liable. Though there was the interest of public involved, the State didnít get immunity due the wrongs committed by their servants and also the state was negligent on their part.

The Supreme Court in this case drew nexus with the Kasturi Lal case and Vidhyawati Case and it was necessary to compare the two cases with the current as in both those cases there was wrong committed by the State and in both the cases State tried to use the defence of immunity given to them while performing sovereign acts so it was important here to refer to the decisions given in those cases.

Cases Referred:
  • Kasturi Lal Ralia Ram Jain V. State Of U. P. [AIR 1965 SC 1039]
  • State Of Rajasthan V. Vidyawati (AIR 1962 SC 933)]
End-Notes:
  1. Kasturi Lal Ralia Ram Jain v. State of U. P. [AIR 1965 SC 1039]
  2. State of Rajasthan v. Vidyawati (AIR 1962 SC 933)

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